Energy at a Crossroads: Azerbaijan, Türkiye, and the Southern Gas Corridor’s Role in European Energy Security
By Seera Sohal
Amid Russia’s ongoing invasion of Ukraine, Europe has sought to diversify its energy mix away from its traditional supplier of Moscow. In 2022, the European Union (EU) produced just 37% of its energy needs and relied on imports for the remaining 63%. Before its 2022 invasion, Russia supplied over 40% of Europe’s overall natural gas imports, with its biggest customers being Germany and Italy. Yet these energy dynamics have changed since 2022. After invading Ukraine, a sanctions-hit Moscow sought to bolster its currency and global financial connectivity by threatening to suspend its gas supply to Europe unless the continent purchased energy in Russian rubles over euros. The countries refused, embargoed Russian coal and oil, and began importing energy from other nations. From here, the world has paid increasingly close attention to the Caspian Sea’s supplier potential.
The European Union (EU) has considered Caspian energy cooperation since the 2000s due to the region’s vast potential and geographical proximity. The Caspian Sea is the world’s largest inland body of water and is situated at the crossroads of Europe and Asia. The sea encompasses 371,000 square kilometers with a coastline reaching 7,000 km in length. When examined by largest coastline, the waterbody lies between Kazakhstan to the northeast (1,422 km), Turkmenistan to the east (1,035 km), Iran to the south (865 km), Azerbaijan to the west (813 km), and Russia to the northwest (692 km). It is important to note that, while Türkiye does not directly border the Caspian Sea, Ankara remains an important actor as it is a key transit country between Caspian basin states and European markets. For instance, through the 1,768 km-long Baku-Tbilisi-Ceyhan (BTC) pipeline, the Turkish port city of Ceyhan ships a daily 650,000 barrels of Caspian crude oil from Azerbaijan to Europe and has a carrying capacity of 1.2 million barrels.
The Caspian Sea region’s high energy potential presents a promising opportunity for Europe’s energy needs. As of 2025, Azerbaijan holds 7 billion barrels of oil reserves and 60 trillion cubic feet (Tcf) of gas reserves. Baku is the top producer of both energy sources from offshore Caspian Sea fields, from which it conducts 96% of its production. The second-largest Caspian oil-producing nation is Kazakhstan, which generates 15% of its petroleum from offshore fields and holds 30 billion barrels in oil reserves and 85 Tcf in gas reserves. Turkmenistan, meanwhile, sources 55% of its production offshore and is the 11th-largest producer of natural gas worldwide. However, Turkmenistan’s insufficient infrastructure obstructs it from acting as a key player in energy trade, although it primarily exports energy to China and began shipping oil to Türkiye via Iran in early 2025. Iran, despite sharing the third-largest Caspian coastline, does not derive energy from the sea due to technical obstacles. Lastly, in line with Russia’s smallest share of the coastline, Moscow does not have a significant presence in Caspian energy production—it only operates two oil and gas fields with small output, amounting to only 1.3% of its overall energy production in 2020. Therefore, the major players within this region’s energy production are Azerbaijan and Kazakhstan.
Yet, this region’s key pipeline for European markets is the Baku-Tbilisi-Ceyhan (BTC) pipeline, through which Türkiye carries Azeri crude oil from offshore Caspian fields to Europe; around 83% of Azerbaijan’s oil exports are carried through the BTC. While Kazakhstan has been increasing its crude oil export through the BTC, 80% of its petroleum is exported through the Caspian Pipeline Consortium to Russia. However, amid worldwide sanctions stemming from Russia’s invasion of Ukraine, Kazakhstan has also sought to diversify its energy trade and has boosted its BTC exports by 54% in 2023 as compared to 2022. In essence, then, the importance of the BTC and Caspian region for global energy markets lies in the littoral states holding promising energy reserves, and this pipeline is playing an increasingly leading role in supplying gas to Europe.
EU and Caspian Interests
Europe must meet its energy needs, Azerbaijan desires energy independence, and Türkiye aspires to become an energy hub. These actors represent different aspects of energy security, but they share the common motivation that energy resources play an essential role in securing a state’s economic strength, political support, and international influence.
To examine these players’ interests, it is wise to note that Azerbaijan, as a landlocked state, places high importance on securing access to global markets for its political and economic viability. Otherwise, Baku would remain vulnerable to foreign political agendas and energy transactions. Consequently, since the early years of Baku’s independence, it has pursued a strategic energy policy to ensure stable pathways for exporting oil and natural gas to international markets. Azerbaijan has become an important figure in this realm after the EU ceased purchasing these energy sources from Russia and looked instead to furthering its gas supply from Algeria, Azerbaijan, Norway, and the United Kingdom.
Within the question of EU-Azerbaijan energy ties, Türkiye remains a central figure due to its crucial role in transiting Caspian gas to international markets. Ankara holds plentiful port and land routes and is strategically located between energy-consuming nations in Europe and resource-rich regions in the Middle East and the Caspian basin, allowing Türkiye to operate as a key facilitator of energy to Europe. Now, with the EU’s cessation of Russian gas imports, Türkiye’s geopolitical position has become even more relevant for international energy needs and its domestic ambitions. Ankara has long professed its desire to become an international energy hub; geographically, most of the logical and cost-efficient transit routes to Europe run through Türkiye, and diplomatically, Ankara maintains a delicate balance between its NATO allegiance and economic relations with Russia, Central Asia, and the Middle East.
Interestingly, Türkiye aspires to become an energy hub despite holding modest energy reserves that do not fulfill its growing domestic needs. Ankara predominantly relies on exports for nearly all of its oil and natural gas demand, thereby tying its energy hub ambitions to utilizing foreign sources. To paint a picture of the Turkish approach to energy trade, in 2009, Ankara’s then-minister for EU Affairs and chief negotiator for EU accession talks described the country’s energy hub desires by stating, “coffee does not grow in Türkiye, but ‘Turkish coffee’ is served all around the world. We brought coffee from Yemen, developed our brewing technique, and stamped our trademark. We could do the same with energy.” Hence, the importance of Azerbaijan for Türkiye’s trade aspirations.
Azerbaijan, with its geographical, historical, and cultural proximity, shares a close partnership with Türkiye and plays an important role in Ankara’s domestic energy needs and international trade ambitions. Azerbaijan first began exporting more natural gas than it imported in 2007 (having previously imported the bulk of its gas from Russia) after the launch of the massive Shah Deniz natural gas and condensate field. While Azerbaijan is now a net exporter of natural gas and sufficiently meets its power demands through domestic production, Türkiye is an oil-importing country. With this in mind, Ankara seeks to control the transit of Caspian hydrocarbons to global markets to boost its energy security and international importance. Therefore, as Azerbaijan ups its energy trade to Europe and as the EU develops key Caspian gas corridors, Türkiye’s role in energy transit is on the rise.
Key Pipelines & Green Projects
Azerbaijan has increasingly maneuvered itself as a strategic partner for European energy security. In July 2022, the European Union signed a memorandum of understanding with Baku to boost its gas exports by more than 20 billion cubic meters (bcm) through the Southern Gas Corridor, a natural gas supply route connecting Caspian Sea fields to Europe. Azerbaijan, which exports 50% of its natural gas to Europe, expanded these sales by 25% between 2021 to 2023, representing an increase from 19 bcm to a figure of 23.8 bcm. Specifically, Baku supplies natural gas to Bulgaria, Greece, Hungary, Italy, and Romania, with seven additional Balkan countries planning to purchase Azerbaijani gas as well.
When analyzing the state’s energy trade, one must understand the role of SOCAR and Shah Deniz. The State Oil Company of the Republic of Azerbaijan (SOCAR, est. 1992) is Baku’s lucrative state-owned petroleum company and plays an extensive role in the country’s power sector. SOCAR sources energy from both onshore and offshore fields in the Caspian Sea and operates Azerbaijan’s sole oil refinery, in addition to overseeing various export pipelines, exploring oil and gas fields, and supplying petroleum to domestic and international markets. Azerbaijan’s biggest oil source is the Shah Deniz gas fields, which are globally one of the largest of their kind and exceed 1,000 bcm. Shah Deniz has two phases of development—Shah Deniz I began production in 2006 and generates 9 bcm yearly, and the annual volume of Shah Deniz II (commenced in 2018) is expected to plateau at 16 bcm.
To export Shah Deniz fuel to European markets, Baku and the EU rely on two key pipelines: the Baku–Tbilisi–Ceyhan (BTC, est. 2006) and South Caucasus Pipeline (SCP, est. 2006). The former runs alongside the latter, and both are owned by the British BP company. Azerbaijan exports around 80% of its oil to international markets through the BTC, which holds a daily capacity of 1.2 million barrels. This pipeline is 1,768 km long—with 443 km spanning Azerbaijan, 249 km in Georgia, and 1,076 km within Turkiye—and ships Caspian crude oil from the Azeri–Chirag–Gunashli and Shah Deniz fields to a Turkish port via Georgia.
Meanwhile, the SCP plays a vital role in the Southern Gas Corridor (SGC), an EU initiative to diversify away from Russian energy by instead exporting Caspian gas, in which the primary source is the Shah Deniz field. This corridor supplies Azerbaijani petroleum to the EU, starting with the SCP (est. 2006), which connects Shah Deniz to Türkiye through Georgia. From there, the Trans-Anatolian Pipeline (TANAP, est. 2018) spans Türkiye on the road to Greece, and the Trans Adriatic Pipeline (TAP, est. 2020) links Greece to Italy via Albania and the Adriatic Sea.
Although Azerbaijan is rich in oil and gas resources, it is strategically tapping into its renewable energy potential for further long-term exports. Baku has two main green projects in mind: a Caspian-Black Sea energy corridor, in which a Black Sea Submarine Cable would play a key role. This transcontinental corridor would send domestically produced wind, solar, and hydropower, and offshore Caspian wind energy to Georgia before being transported to Romania and southeastern Europe through an undersea cable. Hungary and Bulgaria intend to also become key stakeholders in this project, and if realized, this power cable would be the longest of its kind in the world at 1,155 km. This plan appears feasible as Baku has the potential to install up to 7 gigawatts (1 GW = 1,000 MW) of offshore wind power through the Caspian Sea’s abundant wind resources, with a technical green energy potential of 135 GW onshore, 157 GW offshore, and 27 GW in green economic potential (including 3,000 megawatts (MW) of wind power and 23,000 MW of solar energy). In line with its green ambitions, Azerbaijan pledged more than $2 billion towards developing its clean energy capabilities before hosting COP29 in 2024 and intends to boost its share of renewable usage from 20.86% to 33% by 2027.
The Black Sea Submarine Cable Development is undergoing development, with the World Bank approving a 35 million dollar loan to Georgia for the project in 2024. The cable is expected to become operational in 2030 and power nearly one million European homes. While this project would boost Baku’s positioning as a green energy exporter, there are viability concerns in the form of heightened tensions between Azerbaijan and Armenia, alongside Russia’s invasion of Ukraine spilling out onto Black Sea shipping routes. Furthermore, the Caucasus countries currently do not generate enough renewable electricity for export, so this project would require significantly expanding their capacity by at least threefold. Yet for Azerbaijan’s energy policy, its natural gas pipelines and green projects play an essential role in advancing its long-term connection to European markets.
Long-Term Forecasts
Overall, Azerbaijan supplies only a fraction of Europe’s energy needs, but plays an amplified role in the energy security of individual European nations such as Bulgaria, Italy, Greece, Romania, and Hungary. Yet within EU-Azerbaijan hydrocarbon relations, Baku is the predominantly reliant partner. As it draws 90% of its income from petroleum revenues (having made €19 billion from EU sales in 2023), energy exports are vital for Azerbaijan’s economic and political stability. While it has customers outside of this bloc, Baku’s gas exports are primarily oriented towards Europe as no alternative market offers a comparable scale.
Despite these promising developments, there are two main challenges to the serious long-term viability of Türkiye’s transit ambitions and Azerbaijan’s gas trade with Europe: the bloc’s shifting consumption demands and further geopolitical shocks. First, the EU’s move for energy diversification has already brought it alternative supplier nations. In 2022, Norway provided nearly 25% of the bloc’s imports; Russia placed second at 15.3%—down from around 24% the year prior—and the United States came in third at close to 10%. While the EU still casts a wide net for its energy supply, ranging from the Caspian Sea basin and beyond, it is unrealistic that these basin states will be the sole or strongest fuel suppliers to the EU. Instead, the bloc will maintain a wide range of source countries to prevent further geopolitical complications emanating from buying from one primary provider.
Yet a more critical challenge for Azerbaijan and Türkiye’s interests is the EU’s declining demand for natural gas. After Russia invaded Ukraine in 2022, in 2023 Europe’s gas consumption fell to its lowest levels in a decade and dropped by 20% in 2024. Instead, the EU has added increased renewable and liquified natural gas (LNG) sources to its energy mix. While LNG is essentially cooled natural gas in a liquid form, its liquefaction allows it to travel to locations that natural gas pipelines cannot reach, especially useful in the EU’s push to cease using Russian pipelines. Although LNG is not a clean source, it emits 30% less CO2 than oil and 40% less than coal. While Azerbaijan is expanding its green energy capabilities and Türkiye is developing its LNG export infrastructure, the United States has been the EU’s main supplier since 2020. The US accounted for 27% of the bloc’s overall LNG imports in 2023 but jumped to 46% in 2024. As for renewable energy, EU member states have increased their domestic green production. Therefore, it is unlikely that Türkiye and Azerbaijan can replace the EU’s current LNG sources or domestic renewable capabilities. Instead, it is more probable that they will supplement the bloc’s imports, witness increased demand from only specific member-states, and expand their trade to the wider international market
What these lessons reveal is that geopolitical developments can manifest rapidly with long-lasting consequences. Before Russia’s energy threats to the EU during its invasion of Ukraine, it had earlier cut off gas supply to Ukraine in 2006 over a pricing dispute, sparking the EU’s interest in looking for alternative fuel providers. While the bloc sought to develop the Southern Gas Corridor with Türkiye and Azerbaijan in the 2000s, it ultimately cancelled this early iteration in 2013 due to Russian competition and regional conflict within Türkiye’s neighbors, Iraq and Syria. From Russian hostility to persistent regional uncertainty, geopolitical shocks could once again test the viability of Türkiye, Azerbaijan, and the EU’s plans for significant long-term energy cooperation.
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